Why is performance management so poor?

In no area of management does practice differ from theory more than Performance Management. No other responsibility of managers damages their standing as much. Performance management comprises the arrangements that organisations use (i) to maintain and improve the performance of their workforce so that the organisation achieves its goals and targets; and (ii) to motivate employees and to recognise and develop their abilities. In public services it has usually involved meetings between a manager and employee at which the performance of the employee is discussed and sometimes an appraisal rating given. At the same or a different meeting, the personal development of the employee is discussed and plans agreed.

A fact sheet produced by the Trade Union Unison in 2017 on Performance Related Pay stated ‘inevitable variation in the grading of staff by different managers leads to perceptions of unfairness, discriminatory practice and resentment among staff’. Yes indeed. Appraisals conducted by one individual on another can be highly subjective, widely variable and sometimes morally corrupt. Formal criteria can be twisted, used selectively or ignored altogether. A change in manager can turn a staff member’s performance ratings upside down. Favourable ratings can arise for a variety of unofficial reasons including a jobholder having a similar personality and outside interests as the manager; slavish and unthinking support of the manager by the reportee; and a reportee and a manager having similar educational backgrounds. Unfavourable ratings can be related to a clash of personalities or genuine differences on matters of policy and procedure.

The design of performance management systems needs to recognise all of these major limitations. Performance incentive payments as non-consolidated awards to work groups of staff can be effective. The awards should depend on the group meeting a small number of agreed priority targets and should not count towards salary for pension purposes. Promotions should be administered as fairly and professionally as possible. Decisions should not depend on the viewpoint of one person alone.

Most importantly, the personal development of staff should be the primary focus of performance management, not appraisal. It can have major positive impacts. As well as boosting organisational performance, it can assist staff retention, serve succession planning and contribute towards a positive culture. The resource expended on it can be repaid many times over. The skill set of managers of people should include the ability to identify the potential of staff and knowledge of the various means – training, coaching, mentoring, job rotation, small-scale progression experiences – of realising that potential.

Read more in the book Targets and Terror by William Barclay. Available from Amazon: https://www.amazon.co.uk/Targets-Terror-Englands-Management-Revolution/dp/1916035388